Worley weighs up $1b Pilbara solar plant

By Ben Sharples and Mark Jones

WORLEYPARSONS, Australia's largest engineering company, says the Pilbara region of Western Australia could be a location for a $1 billion solar power station.

It made the comments after announcing a record profit for 2007-08 of $343.9 million, up 53 per cent.

Worley said the fiscal 2008 result was underpinned by acquisitions and strong demand for its oil and gas, and metal and mineral services.

The group added that commodity demand from China and India remained strong, but the impact of volatile economic conditions on the project development sector was unknown.

Despite the caution, it said the outlook for its minerals and metals division was positive.

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Yesterday it launched a proposal to build 34 250-megawatt solar power stations in Australia by 2020 using technology employed in the United States over the past 20 years.

Nine groups, including Rio Tinto, BHP Billiton and Fortescue Metals, are funding a study to examine the potential development of the power stations.

Peter Meurs, Worley's managing director for Australia and New Zealand, said one possible location could be the Pilbara region "to meet the needs of all the industrial customers there".

"We've got two players that very much want to move into bankable feasibility [studies] immediately and we've been encouraged by that," he said.

Mining companies were likely to welcome alternative power sources in WA after two incidents this year disrupted gas supplies, forcing some companies to temporarily close mines.

Worley - which provides services to the oil and gas, minerals and metals, power and infrastructure sectors - said it spent $246.6 million last year on eight acquisitions.

Chief executive John Grill said the company's key markets continued to experience positive conditions and it was expecting increased earnings in fiscal 2009 subject to those conditions remaining favourable.

The urbanisation of China and other developing nations was driving resource companies to expand rapidly and increase demand for services and equipment.

Revenue for 2008 was $4.67 billion, up 33 per cent. The final dividend is 47.5c, 71 per cent franked, up from 32.5c.

The hydrocarbon division contributed 73.7 per cent of group revenue, and the company was "positive" about the outlook for the division in 2009.

Intersuisse analyst Peter Russell said: "Energy will continue to be in high demand, and if you look forward for 10, 20 or 30 years, there is going to be considerably more demand. Worley is well placed to be participating in organising much of that."